The following journal entry is recorded in the books of RST Ltd. on issue of debentures :
Bank a/c Dr 18,00,000
Loss on issue of Debentures a/c Dr 6,00,000
To 14% Debentures 20,00,000
To Premium on Redemption of Debentunes 4,00,000
Debentures have been issued at a discount of :
The following journal entry is recorded in the books of RST Ltd. on issue of debentures :
Bank a/c Dr 18,00,000
Loss on issue of Debentures a/c Dr 6,00,000
To 14% Debentures 20,00,000
To Premium on Redemption of Debentunes 4,00,000
Debentures have been issued at a discount of :
Solution
✅ Correct Option: 2
Total Loss on Issue = 6,00,000 covers both discount on issue and premium payable on redemption. Premium on Redemption = 4,00,000. Discount on Issue = 6,00,000 - 4,00,000 = 2,00,000. Discount percent = 2,00,000 / 20,00,000 * 100 = 10%.
Related questions:
2026: 13 May Shift 2
2022: 15 July Shift 2
2025: 13 May Shift 2